SEGA to Acquire ‘Angry Birds’ Studio Rovio

SEGA Corporation, a subsidiary of SEGA SAMMY Holdings, at the meeting of its Board of Directors held on Monday, April 17,  has opted to offer an acquisition agreement to Finland-based mobile game company Rovio Entertainment Oyj, through SEGA’s wholly-owned U.K. subsidiary SEGA Europe Limited.

Through the Tender Offer, SEGA aims to acquire the entirety of Rovio’s outstanding shares and options at EUR 9.25 per share and EUR 1.48 per option, or EUR 706 million in total (approximately ¥103,680 million converted at EUR1 = ¥146.9. Rovio’s board of directors has agreed to and expressed support for the Tender Offer. Shareholders in Rovio who in aggregate hold shares corresponding to approximately 49.1 percent of the outstanding shares and votes in Rovio, have irrevocably undertaken to accept the offer, subject to certain customary conditions.

Rovio is a global mobile-first, games company that creates, develops and publishes mobile games, which have been downloaded over 5 billion times. The studio is best known for the global Angry Birds brand, which started as a popular mobile game in 2009, and has since evolved from games to various entertainment, anime, and consumer products through brand licensing.

“Among the rapidly growing global gaming market, the mobile gaming market has especially high potential, and it has been SEGA’s long-term goal to accelerate its expansion in this field,” said Haruki Satomi, President & Group CEO, Representative Director of SEGA SAMMY Holdings. “I feel blessed to be able to announce such a transaction with Rovio, a company that owns Angry Birds, which is loved across the world, and home to many skilled employees that support the company’s industry leading mobile game development and operating capabilities. Historically, as represented by the Sonic the Hedgehog series, SEGA has released countless video game titles to various gaming platforms. I am confident that, through combination of both companies’ brands, characters, fanbase, as well as corporate culture and functionality, there will be significant synergies created going forward.”

SEGA aims to accelerate its growth in the global gaming market and increase its corporate value by generating synergies between SEGA’s existing businesses and Rovio’s strengths, including its global IPs and live-operated mobile game development capabilities. More specifically, SEGA aims to create synergies with particular focus in:

• Utilization of Rovio’s expertise in live service mobile game operation, to bring SEGA’s current and new titles to the global mobile gaming market, where there is large potential, and many users can be accessed. Rovio’s platform, Beacon, has been operating for 20 years around the United States and Europe.
• Rapid expansion of both companies’ fanbases through multi-media expansion of global characters. Rovio and SEGA have both succeeded in extending IPs Angry Birds and Sonic the Hedgehog, to various media outside of video games, such as movies, anime and merchandising.
• Support cross-platform expansion of Rovio’s IP using SEGA’s capabilities. Rovio is aiming to expand its platform outside of mobile gaming, and SEGA will actively look to support this process through its capabilities

“I grew up playing Sonic the Hedgehog, captivated by its state-of-the-art design. Later, when I played Angry Birds for the first time, I knew that gaming had evolved into a true mainstream phenomenon, with the power to shape modern culture,” commented Alexandre Pelletier-Norman, CEO of Rovio. “Joining Rovio has been an honor and I am proud to have seen Angry Birds continue to grow, as we released new games, series and films. Less known but equally impressive is our industry-leading proprietary technology platform, Beacon, holding 20 years of expertise, allowing tight-knit teams to develop world-class GaaS products.

“Our mission is to ‘Craft Joy’ and we are thrilled at the idea of using our expertise and tools to bring even more joy to our players, enhancing and expanding Rovio’s and SEGA’s vibrant IPs. Red and Sonic the Hedgehog: two globally recognized and iconic characters made by two remarkably complementary companies, with a worldwide reach that spans mobile, PC/console, and beyond. Combining the strengths of Rovio and SEGA presents an incredibly exciting future.”

The friendly takeover feeds into SEGA’s positioning the consumer segment of its entertainment content business as a growth area for its mid-term plan (FY2022/3-FY2023/4), which has seen the company accelerate efforts to strengthen this business through building its existing IPs into global brands, increasing user engagement through multi-platform support and a greater variety of media. The company plans to invest up to  ¥250 billion during the five-year period ending FY2026/3 in investment opportunities in the consumer area.

SEGA has previously bolstered its global development capabilities by acquiring numerous other development studios, from U.K.-based The Creative Assembly in 2005) to  Japan’s ATLUS CO. LTD. (formerly Index Corporation) in 2013.

The global gaming market projected to reach US$263.3 billion by 2026, growing at a CAGR of 3.5% from 2022 to 2026. The mobile gaming market in particular, is set to grow at a CAGR of 5.0% to represent 56% of the global gaming market overall, an increase from 53% in 2022. (Source: IDG Report; October, 2022.) Through the acquisition, SEGA aims to take-in Rovio’s live-operated mobile game development capabilities and expertise in mobile game operation, to accelerate the development of mobile-compatible and multi-platform-supported version of SEGA’s existing game IPs, thereby strengthening and further accelerating global expansion of SEGA’s game portfolio.

The acquisition is expected to close in the second quarter of FY2024/3 and is contingent on the completion of reviews under applicable antitrust laws and other customary conditions.